*1 Ill the facts and circumstances underlying considered Having Code, of the Election provisions Section 979 and related elections, in fair and and the orderly interest of the State interests claim to have been impaired by which appellants law, we are convinced that 979 is a legitimate Section exercise of and an essential element of legislative authority integ- Legislature’s plan assuring efficiency whose process, plan constitutionality the electoral rity has been sustained this Court since the consistently Election in 1937. Because appellants enactment of the Code have their burden of consti- establishing failed to carry any 979, the tutional of Section order the Common- infirmity wealth Court is affirmed.
Order of the Court affirmed. Commonwealth HUTCHINSON, J., concurs in the result. McDERMOTT, JJ.,
NIX and dissent. LARSEN, J., dissents on the basis of denial of equal and on the basis of In re Nomination protection Papers Smith, 494 Pa. (1981). A.2d 1156
Pennsylvania, Appellants.
Supreme Court of Pennsylvania.
Argued May 1982.
Decided Oct. *3 Ressler, Gen., Joel M. Deputy Atty. appellants. Mullholland, III, Blackmond, Daniel M. Barbara John S. Hoff, vice, for pro appellee. hac NIX, LARSEN, O’BRIEN, C.J., ROBERTS,
Before and HUTCHINSON, FLAHERTY, McDERMOTT and JJ. THE OPINION OF COURT NIX, Justice.
The 448.101et (Act), Health Care Facilities Act P.S. § and economical distri- enacted to insure seq. orderly
bution of health care resources to prevent duplica- needless tion of services and to enhance the health and welfare in this Commonwealth. The Legislature charged Depart- ment of Health with (Department) sound, a fostering coordi- nated health care This system. concerns litigation the valid- ity of the Department’s ruling that a certificate of need must first be obtained by the Shenango Osteopathic Valley before Hospital (Hospital) purchase and use of a Computer- ized scanner). scanner Tomography (C.T. The principal on is question appeal1 whether the had hospital a clear right to the special relief from the Department’s ruling afforded it the Commonwealth Court.
The as facts, record, adduced from the reveal that on July 29, 1981 the entered into a Hospital contract of binding for a full scanner2 purchase body C.T. from Technicare Cleveland, Corporation Ohio and ($67,125.00) 25% paid $268,500.00. purchase total price Hospital accept- ed 20,1981 of the C.T. scanner on delivery August made and additional balance of payment leaving 10% due upon installation. The Act required certificates of need for new services,3 institutional health that including (at time) capital expenditures $150,000.00, excess of and/or an operating appeal 1. Jurisdiction to hear this is vested in this under 42 Court 723(a), 311(a)(4). Pa.C.S. 42 Pa.C.S. 5105 and § Pa.R.A.P. complex highly piece A equipment scanner is C.T. of medical 2.. merges computer x-ray technology. diagnostic which It. is a tool anatomy study body used to the internal of the human in cross-sec- tional views. *4 adopted response 3. The Health Care Facilities Act was in to Federal 93-641, which, alia, requirement Law inter Public contained a of the program applies existence of a certifícate of need “which to the obligation capital expenditures offering of within the State and the acquisi- the within State of new institutional health services and the major equipment tion of medical and which is consistent with stan- by Secretary dards established the Health and Human [of Services] by regulation. proce- program provide A of certificate need shall for penalties requirements program.” dures and to enforce the of the 2(a)(4)(B). requirements U.S.C.A. Failure to meet the en- § 300m — dangers grants the financial available to the under Commonwealth availability programs federal health the as of federal funds is condi- upon compliance. tioned state The $82,200 in threshold.4 Act mandates excess of a expense to the institution of a of a of intent filing prior notice which of acquisition equipment for services or the project 4, 1981, need.5 August a On certificate require Health Inc. and supplied Systems Hospital purchase a notice of intent of N.W. with Pennsylvania did notice of intent sent by hospital C.T. scanner. The 29,1980 entered into on or the July not refer to the contract under that contract. subsequent performance 7. OF NEED CHAPTER CERTIFICATE required; health of need new institutional 448.701 Certificate § subject services to review offer, (a) person develop, or estab- No shall construct otherwise establish within the State new institutional lish or undertake to health service obtaining from the first a certificate need without For chapter, department. purposes “New of this institutional shall include: health services” facility (2) Any expenditure by or on of a health or behalf care $150,000 which, organization un- health in excess of maintenance consistently applied, generally accepted accounting principles der capital expenditure.... ais (3) any capital by obligation expenditure or of a on behalf facility results in addition of a health service health care not which through facility previous provided in the 12 months in or (4) in health which is offered or The addition of a service facility expense through having operating in health care expense operating annual established excess of the minimum accordance with Title Act, XV of the Federal Public Health Service through regular in or on a basis such and which were not offered organization facility within the health care or health maintenance period prior services would be offered. 12-month time such $ ‡ ‡ ‡ 3: by higher expenditures requiring (d) review are set As minimum Government, immediately apply in those limits shall the Federal expenditure by lieu of the P.S. § minimum limits set this act. 35 448.701 by way proposed projects requires of a letter of Act 5. The notice 702(a) of the Act: intent under Section need; intent; application; is- 448.702 notice Certificates suance facilities, equipment requiring Projects a certifi- (a) services or shall, planning, be possible time in their of need at the earliest cate department in a systems agency and submitted to the health scope advising nature of detail of intent in such letter the 448.702(a) project required regulations. 35 P.S. § as *5 44 29,
Almost two months later (September the 1981), Hospi- tal to withdraw sought without its of prejudice letter intent. The letter of that withdrawal assumed the new thresholds of for $600,000 capital expenditures $250,000 and for operating established under expenses the federal Omnibus Budget 1981, 97-35, Reconcilation Act of P.L. 936 Octo- (effective ber 1981)(Omnibus Act) the automatically negated neces- of a certificate of need sity review this transaction. The letter, the that the ignoring reality contract had been en- tered into and the substantially performed prior to increase of thresholds, those implied that acquisition intended would be made the under new thresholds. The Department, on the facts set forth in the relying withdrawal, letter of nevertheless contended that the obtaining of a certificate of need was still under required section relat- 701(a)(3),supra, ing to a which results capital expenditure in the addition of a health service not in the provided previous months. Moreover, the Department did not address the applicability of new Act the Omnibus thresholds to transac- completed tions because the had fact Hospital withheld the of its of the completed purchase C.T. scanner. On November 1981 the learned for the the Department first time true facts surrounding purchase scanner.
On November filed an of the Hospital appeal with Department’s decision Health reviewability State Board Hearing (Board). On November Facility Department notified that under the circum- Hospital its stances the C.T. scanner was a violation of acquisition and Act of the scanner would deemed a operation be wilfull violation 17,1981 On December subject penalties. counsel for the informed the that in Hospital cease violating Act, order to should divest Hospital itself of and or ownership possession scanner obtain a on Thereafter, certificate need. 1982 the January filed an for a certificate need Hospital application also moved for a continuance appeal of its from the determi- nation The motion for continuance was reviewability. granted. for a certificate 1,1982, application March while the
On filed a petition was, is, Hospital need and still pending, relief. injunctive declaratory for review seeking that the was constitutional objection thrust of the Hospital’s under the Act Department to the authority delegation Constitution, and 1 of the Pa. Art. contravenes Section was scanner use of the C.T. that the denial of interim and capricious. arbitrary be enjoined that the Department
The Hospital requested Hospi- to the respect from Act it with against enforcing right and sought of the C.T. scanner tal’s operation of the issues a determination use the equipment pending presented. for Application filed Hospital March
On A hearing Court. with the Commonwealth Relief Special objections 1982. Preliminary for April was scheduled a demur- in the nature of of jurisdiction, raising question of impertinency on the grounds rer and a motion to strike made of No disposition were filed Department. objections. the preliminary date, the Honorable held on the hearing appointed
After 14, 1982, (a) order, dated April entered an Craig David W. scanner pending to use the C.T. authorizing Hospital or of need petition the certificate final disposition later, operation that review, (b) holding whichever is the Act to be in violation shall not be deemed the scanner en- bringing any from the Department and (c) enjoining of the C.T. on operation action based forcement or penalty during operation with its interfering or otherwise scanner for review. or the petition of the application the pendency filed a 1982, the April The following day, as an auto- which Court, operated to this notice of appeal mo- On 1736(b).6 to Pa.R.A.P. pursuant matic supersedeas Security Exemption from Rule 1736. required security of: (a) be No shall General rule. thereof, acting any in his (1) or officer The Commonwealth capacity. official tion of the Hospital, Judge vacated Craig on supersedeas 22, 1982. April
I. outset, At the we address the of the Com propriety monwealth Court’s exercise of jurisdiction. Appellant ques tions the Commonwealth Court’s of jurisdiction exercise because of the failure Hospital’s alleged to exhaust available administrative remedies.7
A
factor
significant
considering
appropriate
ness of
intervention is the
judicial
doctrine
exhaustion
administrative
remedies.
Canonsburg Gen.
Hospital
*7
Health,
68,
492 Pa.
422
Dept.
(1980);
A.2d 141
Delaware
Center,
Convalescent
Inc. v.
488
Valey
Beal,
292,
Pa.
412
See,
A.2d 514 (1980).
Commonwealth v.
e.g.,
Glen Alden
57,
418 Pa.
to this of an in (a) operate supersedeas Subdivision of this rule shall as in favor party. of such appellant employed Although terminology “the Commonwealth jurisdiction,” Court lacked it assert or did not Court Commonwealth lacking subject-matter personal jurisdiction. in either Rather appellant’s upon argument jurisdiction” entire as “a lack of is based alleged failure to exhaust administrative remedies. Certainly complaint alleging against a cause of for action relief provisions the Commonwealth derivative from of the federal and subject-matter jurisdic- state constitutions a claim states within the 761(a). tion of 42 the Commonwealth Court. We re- § Pa.C.S.A. committing confusing judge- frain from the fundamental error of subject- made matter rule of exhaustion administrative remedies with jurisdiction legislature conferred or inherent in the See, Susquehanna Valley common law. land, Mile Alliance Three Is- (3rd 1980). 619 F.2d 245 Cir.
47 constitute “premature of the administrative interruption process.” (Citation omitted).
Id.,
In all cases where a is or a en- remedy provided, duty joined, or direct to be done anything act or acts of by any of this assembly commonwealth, the directions of the said acts shall be strictly pursued, and no shall be penalty inflicted, or done to the anything agreeably provisions of law, common in cases, such further than shall be necessary such act or carrying acts effect.
Act of 21, 1806, March P.L. Sm.L. P.S. § 156.8 The doctrine of exhaustion of administrative remedies as a restraint upon the exercise of a court’s not equitable powers only reflects a recognition the general di- assembly’s rective of strict compliance with reme- statutorily-prescribed dies, it also that an acknowledges failure to unjustified follow the administrative scheme undercuts the foundation upon which the administrative was founded. process This premise was set forth in our succinctly decision in T. Men- delson Co., Inc. v. R.R. Pennsylvania Co., 470, 474, 332 Pa. A.2d 822 (1938).
The technical nature of the and the subject, peculiar of an ability administrative it, to examine suffice body as *8 a matter of public to policy displace preliminary court action.
The premature interruption of the administrative process restricts the agency’s to opportunity develop adequate record, factual limits the in the agency exercise of its expertise and the impedes of development a cohesive body law in that area. U.S., McKart v. 395 185, U.S. 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969). also, Salfi, See Weinberger 422 749, U.S. 95 2457, S.Ct. 45 L.Ed.2d 522 (1975); Parisi v. repealed by 6, 1972, 8. The Act of 1806 was the Act of December Act 290, simultaneously 3 substantially and was § in reenacted the same language. Statutory Construction Act of 1 Pa.C.S.A. 48
Davidson,
405 U.S.
92
In Borough of Green
this Court
unsuc-
supra,
cessful in
a consensus on
achieving
question
whether the
mere assertion of a constitutional
to a statute
challenge
eliminates the exhaustion of remedies requirement and per-
mits equitaJble
Nevertheless,
intervention.
it was clear from
that decision that four members of this Court
agreed
doctrine of exhaustion of remedies would not bar equitable
intervention where there are both a substantial
question
and the absence of an
constitutionality
adequate statutory
at
remedy. 459 Pa.
The does not or to provide any appeal Act remedy process resolve such issues. The is set jurisdiction explicitly Board’s forth.11 the upon to Authority pass constitutionality not Nor Act is mentioned. it reason- agency’s enabling may be inferred. The criteria for on Board ably membership with (“familiarity and health care facilities or for expertise relevant will board training and which assist the experience to perform function,” 448.501), its do not support P.S.A. § a claim that these could challenges adjudicated by be Board.12 The of the Board’s Act is constitutionality enabling beyond agency’s jurisdiction.
Moreover, the issues raised the instant are challenges not within the of the purview expertise Board and/or Department no factual issues requiring development of a are record The of the or present. participation Board at this is stage unnecessary.
To the determination of postpone such serious questions the statute’s serves no are constitutionality purpose. We not here faced with a premature of the adminis- interruption trative process but rather a determination the constitu- hearing 448.502 Powers and duties of the board § (a) hearing powers board have the shall and its duties shall be (1) appeals departmental applications hear To from decisions on for certificates of need or amendments thereto. (2) upon petition objections published regulations, To hear to criteria, systems agency or department standards of the health or policies appropriate as to the set therein forth and where request promulgating agency policies. to reconsider such (3) appeals department To hear from decisions of the from application relating which arises matters certificate need. (b) Hearings may be held before one more or members board, by majority but action of the board shall be made vote of 1979, 19, 130, 48, 502, 1, July the board. P.L. No. effective Oct. § 1980, July 1979. As amended No. P.L. effective § Oct. 35 P.S.A. 448.502. surprisingly, appellant identify statutorily-pre- 12. Not does not adequate remedy urges appellee adjudicate scribed it must utilize to particular the constitutional claims. None exists these facts. under *10 50
tional
of the statute which
validity
provides the sine
non
qua
for the
of the entire
The evils of
validity
process.
piecemeal
judicial intervention in the administrative
are not
process
raised where judicial relief is limited to resolving questions
concerning of
constitutionality
an
act. Cf.
enabling
of Green
Borough
Tree v. Board of
Assessments,
Property
459
at
supra,
281,
Pa.
328
at
also,
A.2d
825. See
v.
Lynch
Owen J. Roberts
District,
School
Thus, the Commonwealth Court did not properly refrain from its exercising jurisdiction.
II.
that
failed
urges
Hospital
to estab-
lish
to
entitlement
the relief
to
granted pursuant
Pa.R.A.P.
It
1532(a).
has previously been stated:
aAs preliminary consideration, we
that on an
recognize
from the
appeal
grant or denial of a preliminary injunc-
tion, we do not
into the
of
inquire
merits
the controversy,
but only examine the record to determine if there were
any apparently reasonable grounds for the action
court below.
if it is
Only
that no
plain
grounds exist to
support
decree or that the rule
lawof
relied
upon
erroneous or
palpably
will we
misapplied
interfere with
the decision
Chancellor.
Intraworld Inc. v. Girard
Bank,
343,
Trust
461 Pa.
It is significant
that
the Court’s determination as to
“any apparently reasonable grounds” must be predicated
upon
independent examination of the record. Cf. Sing
zon v. Department of
Welfare,
Public
496 Pa.
Whereas the constitutional
issues raised without an
administrative forum or procedure to adjudicate them re
lieved the Commonwealth Court of the
bar,
exhaustion
claims raised do not establish a sufficient
likelihood of
success on the merits to have warranted the
of
granting
See,
relief.
preliminary
Commonwealth v. Forbes Health
Systems,
492 Pa.
Moreover, the deleterious effect
upon
public interest
in the
of health
delivery
services in this Commonwealth by
disruption
the administration of the Act indicates that the
“interest of justice” does not
require
granting
special
relief
pursuant
Pa.R.A.P. 1532(a). We are mindful of
Judge
concern that
Craig’s
the C.T. scanner should not stand
14. We note
a
challenge
that
federal constitutional
to Public Law
See,
upheld.
93-641 was not
North Carolina ex rel. Morrow v.
Califano,
F.Supp.
(E.D.N.C.1977)
(three-judge court),
af-
firmed 435
(1978).
U.S.
98 S.Ct.
idle. However, we that recognize comprehensive health planning seeks to achieve economic and geographic efficacy in the expenditure of funds and the capital assumption large additional It operational costs. further represents legislative judgment Act, that the provisions in the run, will long be in the best interest of the health and welfare of all the citizens this Commonwealth. The indiscriminate acquisition of costly, sophisticated medical equipment increases unnecessarily costs and encour- hospital ages over-utilization of that equipment.
It is to be that anticipated provisions comprehensive health will planning extent, to some curtail necessarily, judgment to be exercised the individual health by facilities. The decision to this intrusion permit upon autonomy the individual facilities represents Congressional judgment that such a course of action is in the best interest citizens served those facilities. Our legislature, by partic- in the ipating has concurred in Congressional plan, that North judgment. Califano, Cf. Carolina ex rel. Morrow v. This is supra. an area of concern clearly legislative within that to establish the body’s prerogative public policy of the Commonwealth in the area. Thus we find no prima *12 facie to relief and no right ground reasonable for the grant- of the ing relief. special to of the
Attempts magnitude minimize question in presented this action that it by suggesting relates only the short of time between the actual period acquisition the C.T. scanner and the of the new adoption Omnibus Act thresholds is misleading. It is to be noted that appellant contends that a certificate of would need be in required any event under of the 448.701(a)(3) Section Act. Even assum- that ing is correct in appellee limiting any possible derelic- tion to the to the period establishment of the new prior thresholds, the of that dereliction should not be gravity Moreover, minimized. the conduct of appellee throughout action, this such as their lack of candor in history information to the supplying Department regarding of the is acquisition scanner, C.T. not such as to warrant equitable intervention. in
Although posture this action the Commonwealth Court not has reached the where must file stage appellant an answer where affirmative defenses are equitable proper- ly raised, we are compelled that, to observe “He who comes into a court of come clean equity must with hands.” the Order of
Accordingly, the Commonwealth is Court vacated hereby and case remanded.
FLAHERTY HUTCHINSON, and JJ., filed dissenting opinions LARSEN, J., joined. in which
FLAHERTY, Justice, dissenting. on the
Relying Judge below, set forth reasoning by Craig I dissent from the which opinion majority only serves further inexhaustible at work. bureaucracy
The result reached by majority requires that a power- ful diagnostic tool idle while institutional lay wrangling inches the to a final parties regarding outcome the applica- Act, of the Health Care bility Facilities 35 P.S. 448.101et scanner; to the seq., hospital’s this is a acquisition condonation of institutionalism its darkest endeavor one in I join. which cannot
LARSEN, J., this joins dissenting opinion.
HUTCHINSON, Justice, dissenting. I with one of agree part Opinion holding the Majority judicial intervention Court ap- Commonwealth in this case. I from that propriate portion dissent *13 which the majority opinion holds Commonwealth Court erred in the to use the C.T. authorizing Scanner hospital final of its certificate of need pending disposition application 54
or the final
of its
for review
petition
seeking
disposition
and
relief on constitutional
injunctive
grounds.
declaratory
As the
states:
accurately
majority
“In
the
preliminary injunction,
plain-
order to sustain
clear, the need for relief must
tiffs
to relief must be
right
if the
immediate,
be
and the
must be
injury
irreparable
is not
injunction
granted.”
omitted)
At 439
(citations
(emphasis
original).1
that,
also
majority
recognized
the determination as to
whether this standard is met is vested in the sound discre-
tion of the
See,
Chancellor.
at 439. On
supra
appeal from a
decree
or
granting
refusing
preliminary injunction,
has
appellant
overcome;
a very heavy burden to
such a
decree will not be interferred with
review in
upon appellate
the absence of a
abuse of discretion
plain
court below.
McDonald v.
393 Pa.
Noga,
A.2d 842 (1958). If we
find the Chancellor’s actions were reasonable we do not
proceed to a consideration of the merits of the case unless
reasons for the action of the court below do not exist or the
rules of law relied on are
or
palpably wrong
clearly inappli-
cable.
Id.
In the
present
of the C.T.
below
price
ed the
Scanner
purchase
$600,000.00 established under the Federal Om-
minimum of
Reconciliation Act of 1981 and that while
nibus Budget
purchasing
be
hospital may
penalized by
amendment,
the federal
it was no
equipment prior
448.701(a)(2)
(d).
in violation of Section
P.S.
longer
purchase
concluded the
was not a
Moreover, the Chancellor
injunction
mandatory preliminary
which commands
This is not a
requires
positive
performance
act and which
a much
of some
merely
injunction
imposed
stronger
is
case than that of an
which
Scranton,
preserve
quo.
District of
status
See Roberts v. School
(1975).
55 meaning the 35 within P.S. 5448.- service” “health new 701(a)(3).2 legal where substantial be granted
An injunction may the rights resolved to determine must be questions of Public Wel v. Department Fischer parties. respective Histor Forge 1172 fare, (1982); Valley Pa. 439 A.2d 497 491, 426 Pa. 493 Chapel, Memorial Washington ical Society whether the need not decide 1123 This Court (1981). A.2d stage erroneous at this of law are Chancellor’s conclusions I “reasonable”. Since were review. We need find only they reasonable, we should were his conclusions of law believe without further considera appeal dismiss the Department’s of the contro the merits upon tion or expression opinion hearing after a final review is appropriate only as such versy 9 generally Court. See and decree in the Commonwealth (1962). 393 p. Standard Pa.Practice § for equita- there is no basis That also concludes majority lacks “clean hands.” ble intervention because the hospital inferences drawn from bases its conclusion on majority notice of intent to C.T. Scanner hospital’s purchase 4, 1981, in which the on August filed with the Department contract, and from the hospi- failed to mention the hospital its letter of withdrawing tal’s letter of September the contract had intent without notifying at that time. performed been entered into and substantially evidence the hospital The two letters represent only Based to mislead the Department. deliberately attempted letters, declined to attribute an on these same the chancellor evil intent to the actions. hospital’s inference, this is able to draw its own deduc-
While Court record, tions and the facts of see W. conclusions based on E.W., 396 Penn District v. I.B. of Pa. Twp. School A.2d 258 I do not believe we should find the Chancel- (1958), lor was unreasonable in a different conclusion. reaching constituting clinically 2. “Health is defined in the Act as service” diagnostic related treatment or rehabilitative services. See P.S. merely was 448.103. The chancellor determined the C.T. Scanner diagnostic existing new tool for an and/or treatment service. Com- Op. (filed April 1982). Slip monwealth Court at 3 I Finally, am although by troubled unilateral hospital’s efforts to acquire the C.T. Scanner without a certificate of need to the increase in prior threshold, integrity scheme could be statutory imposition preserved to 35 penalties pursuant 448.603 for the period P.S. be- 29, 1981, tween when the July order purchase signed, 1, 1982, until October the effective date of the increased threshold.
LARSEN, J., in this joins dissenting opinion.
Persifor Robert Sol., S. Asst. J. Educ., Bd. Public School of Pgh. Legal Dept., Dist. for Pittsburgh, appellant. Shuster,
Elisabeth Mollie McCurdy, S. A. Deputy Attys. Gen., Harrisburg, appellee.